Public and Private Sector Development

Creating an enabling environment for sustainable SME development

Capacity of local institutions and private sector

Reinforcing and addressing skills gaps

EIIP provides support to the private sector (particularly small- and medium- sized enterprises or SMEs) to build and strengthen management and technical capacities for the provision of sustainable infrastructure based on local resource-based approaches.

Private contractors usually implement infrastructure works (housing, roads, water and sanitation, health and education facilities), so it is important that they are able to function in a conducive business environment. In building a competent local construction industry, EIIP works in the following areas.

Creating an enabling environment and delivery systems

Contractual relations between the client, consultants and contractors (particularly SMEs) are often not regulated on an equitable basis. This is due to lack of legal system or environment that supports rights and obligations of small-scale contractors in the design of rural infrastructure programmes.

Therefore, it is essential to create an enabling environment in which small-scale contractors can effectively develop and run their business in the industry. An enabling environment should adapt regulations relevant to the contractors, including ensuring a procurement system that they can manage, giving them access to resources (e.g. credit, equipment, materials, continuity of work), setting wages, at the same time as considering national minimum wage legislation and work productivity.

Contractor identification, registration and contract management

Enabling classification and selection of contractors is of utmost importance for opening the public-sector construction market to emerging, small- and medium-sized contractors. Often, a government registration and classification system does not cater for the specific requirements of labour-based work methods, thus excluding contractors’ entrants to the sector (i.e. SMEs). Registration criteria may need to establish a special category within the existing classification system for those contractors.

Contract management entails the introduction of procedures allowing the contracting agencies to procure works and services from the public sector, which then outsource design and supervision of construction works to consultants. Appropriate management systems and procedures, for example, open efficient competition, transparency and accountability in procurement, and enable SMEs to participate effectively and fairly in the construction market.

The optimal solution is to issue contracts that enable SMEs to grow and sustain, preferably by packaging work into manageable contracts. This can be achieved through contracting specific work-operations that can be implemented with the available resources and technologies (e.g. labour- only activities, works on small structures, bio-engineering, plumbing, roofing, etc.).

Technical knowledge and skills development including for labour practices and social and environmental safeguards

Effective vocational and professional education is a major development factor for a striving construction industry. SMEs often lack access to training, which compromises their business environment, affects the quality of works, costs and sustainability, and increases maintenance demands. Investment in training should not been seen as only for a targeted group of practitioners, but rather as a total capacity development programme involving all stakeholders for the entire construction sector.